Friday, December 24, 2010

ICANN Delays Introduction of New Top Level Domain Names: Six Actions Brand Owners Can Take Now In Advance of Launch

The Internet Corporation for Assigned Names and Numbers ("ICANN”), the entity that oversees the Internet domain name system, has once again delayed the introduction of new generic top level domain names (“gTLDs”) until likely sometime in 2011. The chief issues continue to revolve around brand owners’ concerns over trademark protection and costs associated therewith, of which I have blogged about here

As brand owners await ICANN’s imminent launch of various new gTLDs they should be reviewing and, if necessary, revising current domain name policies to meet anticipated new challenges. Below are six actions brand owners can take right now to ready themselves for the potential deluge of hundreds (and some argue thousands) of new gTLDs.

1. Determine annual budget. What’s the annual budget for 2011 for reserving or maintaining domain names that point towards active sites or redirect to active sites and for pure defensive plays (those domain names reserved for the purpose of keeping them out of the hands of cyber squatters and Domainers)? Once you have that number, plan accordingly.

2. Conduct periodic audit of domain name portfolio. An audit should determine which of your current domain names could be dropped due to little or no activity. If there’s little or no activity on certain sites, than those domain names probably have little or no value to cyber squatters anyways. Consider letting those go in lieu of more “valuable” domain names.

Maintain those .COM – and possibly those .BIZ, .NET, .INFO and country code - domain names that correspond to common misspellings of brand names (consider new devices on market and what typos are being made), for key brand names in key territories, for generic product names (i.e., runningshoes.com for running shoe company) and for potentially damaging sites such as yourtrademarkSUCKS.com. Dot COM domains are still the most coveted of gTLDs by Domainers and cyber squatters. I suspect that cyber squatters would prefer NIKEapparel.com over Nike.gardening or FORDvehicles.com to FORD.movies.

Add new domain names that correspond to newly adopted gTLDs that are likely to result in misdirected Internet traffic and potential lost profits. For example, automakers should reserve domain names that correspond to .AUTO, .CARS and .TRUCKS gTLDs. However, I really can’t think of a valid business reason why auto manufacturers would want to allocate funds to reserve domain names that correspond to unrelated gTLDs, such as Highlander.food and F150.gardening. Unless there’s an issue of dilution, those funds should probably be allocated to enforcement activities.

Also, as new brand names are launched, reserve priority domain names that correspond with those new names. For those brands that go to the graveyard, consider allowing those corresponding domain names to expire in due time.

3. Establish policing policy. In addition to compiling a healthy domain name portfolio, brand owners must also actively police third party registrations of potentially harmful domain names. A global watch program can cost thousands of dollars annually, so plan accordingly if such a service is desired or is necessary. Alternatively, brand owners can opt to conduct periodic in-house searches.

4. Establish consistent policy for enforcing brands. Create a policy for taking action against third parties that reserve potentially harmful domain names. The policy should be detailed. Determine in advance – outlined in policy – which “infringements” warrant action. When a credible threat is detected, take quick and decisive action. However, pick your battles as funds are likely limited.

5. Don’t overprotect. Brand owners simply cannot reserve all domain name permutations. It’s just too costly. That will become more evident as new gTLDs are launched. A better approach is to combine a healthy domain name portfolio with consistent monitoring and enforcement.

6. Take a deep breath and relax. For most brand owners, the launch of new gTLDs will likely go unnoticed. For those same brand owners, there will likely be bigger fish to fry in 2011.

To read more about this issue, check out Economic Considerations in the Expansion of Generic Top-Level Domain Names: Phase II Report: Prepared for ICANN that was released this month.

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